Approaching business model innovation in the age of Industry 4.0 - The case of Breton S.p.A

Abstract

The speed and breadth of the technological changes we are witnessing in recent years makes it evident that, in the coming decades, the technologies driving the Fourth Industrial Revolution or, better, Industry 4.0, will fundamentally transform the entire structure of the world economy, communities and human identities. From a business point of view, Industry 4.0 requires more than just a technology-based improvement: a thorough rethinking of companies’ value chains and a radical transformation of their business operations and value propositions is necessary, since established business models may no longer guarantee successful performance in the long term. In this context, the aim of the dissertation is to illustrate the impact of Industry 4.0 on business models through the real case of a machine and plant manufacturing company, Breton S.p.A. The case, developed through a consultancy project, seems particularly insightful and well suited for this kind of analysis: Breton is a local gem with a long lasting history of success, which defines itself as “driven by innovation”, as proven by the long track record of marketed innovative plants and machines in the field of stone transformation and engineering. Since 2015, Breton has started a change programme named “Smart Flow”, aimed at driving the company through the complexities entailed by Industry 4.0 and adapting to the derived technological and organizational changes. This programme has highlighted the interconnected effects of Industry 4.0 on Breton’s current business model and, at the same time, has revealed some of the typical concerns that managers face in reshaping the company value proposition, as well as some resistances to innovation, despite the innate innovative attitude embedded in Breton’s corporate culture. The dissertation is structured as follows: after an introductory literature review, aimed at framing the phenomenon of Industry 4.0 and describing the main design principles and technology enablers, the impact of Industry 4.0 on business models and the derived implications for business model innovation are analysed from a theoretical point of view. A description of the peculiarities of the manufacturing sector in the Italian context and of the public policies enacted so far at the local level with respect to Industry 4.0 serves as an introduction to the real case of Breton S.p.A. A comparison between the AS IS business model of the company and the TO BE dimension in the perspective of Industry 4.0 will provide concreteness to the study. Ending remarks on how to formulate a plan for strategic and business model innovation for Breton S.p.A. will conclude the dissertation.